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Overarching statutory regulation vital for the sector

Wednesday 16 December 2020

Propertymark highlights the importance of regulation within the property sector and divergence in rules across the UK in response to the Department for Business, Energy, & Industrial Strategies consultation which called for evidence on the UK’s approach to the recognition of professional qualifications and the regulation of professions.

The consultation sought insight on the UK’s approach to ensure the way we recognise qualifications from other countries is fair, complements the needs of the UK workforce and maintains high levels of quality and consumer protection, promote a regulatory environment that supports jobs, social mobility, and access to professions for individuals from all backgrounds and ensure the regulation of professions is forward-looking, adaptive and meets the needs of consumers.

The importance of regulation

Propertymark believes regulation within the property sector:

  • Protects public interest for environmental reasons
  • Protects public safety for health reasons
  • Value for money/protects taxpayer
  • Enables professionals to charge more for their services
  • Protects consumers from receiving low-quality services
  • Provides training

The main rationale for regulation in the property sector is that estate agents working across the UK and letting agents operating in England and Northern Ireland are unregulated, which means anyone can set up a business. Outside of regulatory requirements for letting agents in Scotland and Wales, there are no minimum standards to work in the sector and there are no statutory rules to ensure agents are suitably qualified. Additionally, agents who are not members of a professional body do not have to meet minimum competency standards. As a result, there are four other rationales for regulation:

  • It will protect consumers from receiving low-quality services.
  • It will provide training and continued professional development for professionals working in regulation will protect public safety for health reasons. 
  • It can help to bring greater levels of consistency and a joined-up approach.

Propertymark members

Our members join and seek to become Propertymark Protected voluntarily to demonstrate transparency and ensure they are at the forefront of developments in the industry in accordance with our Conduct and Membership Rules. Members have opted to become regulated in a mostly unregulated sector by complying with higher standards than the law demands. Members must comply with a series of requirements including:

  • Propertymark’s Conduct and Membership Rules
  • Completing 12 annual hours of continued professional development (CPD)
  • Having an accountant's report carried out on their designated client account.

Propertymark’s standards set a blueprint for much-anticipated regulation within the sector as the current standards we set, against which applicants are assessed are a fair reflection of the level of skill, training, education, and experience required to practice their profession.

International recognition

Given the variation between legislation and practice in property across the UK, Propertymark requires those individual agents coming forward for recognition and membership of the UK professional body to be competent in the UK context in which they plan to work. Reliance is put on the individual to map their achievement against the relevant learning outcomes which are then considered by the relevant team. This enables Propertymark Qualifications to develop a list of ‘acceptable’ and proxy-type qualifications. However, given the differences in law and practice, it is unusual for real estate/property agency qualifications to be mutually recognised internationally. This would be further complicated by licenses to practice in a number of countries and the development of a similar regulatory system in England and across the UK.

Propertymark has a good working relationship with CEPI – European Association of Real Estate Professions, the National Association of Realtors (NAR), a North American trade association for those who work in the real estate industry, and Ireland’s Institute of Professional Auctioneers and Valuers (IPAV). For instance, during the COVID-19 lockdown period, Propertymark hosted a webinar with representatives from NAR and IPAV to share best practices and look at and discuss how the pandemic is affecting agents in their respective countries.

Qualification

We believe that qualification should be included in the overarching statutory regulation of the whole sector. Without minimum entry requirements to practice, such as a qualification and a code of practice, it means that consumers are potentially dealing with someone who does not understand the technicalities involved in buying and selling and renting property or understand how to analyse the level of risk to their business.

Ensuring agents are suitably qualified and meet minimum competency standards is the only way to drive up standards of service for consumers and eliminate the bad practice in the sector. Regulation for the property sector will provide training and continued professional development for professionals working in the industry. This is important because sales and lettings are complicated tasks governed by complex areas of law. For instance, up to June 2015, there were 145 laws with over 400 regulations that landlords need to abide by to legally let a property in England and Wales.

Redress

The main consumer protection impacts in the housing market are problems with redress. This is important because complaint handling for consumers is a widespread problem in the property sector. For instance, the Property Ombudsman’s annual report 2019 shows that ‘complaints handling’ was the second most common cause of complaint about sales and the third most prevalent complaint about the lettings sector. The other most common complaints from sales and lettings include, ‘communication and record-keeping’, ‘management’ and ‘marketing and advertising’. There are three reasons for this.

1) It is not clear to consumers who to raise a complaint with.

2) There are gaps in redress.

3) The existing redress schemes are inconsistent in the way that they handle complaints.

Propertymark believes that all agents should adhere to an approved code of practice that can be used by the redress schemes to adjudicate consistently across the sector. An approved code will also ensure that agents can demonstrate a high level of customer service and protection, such as a robust and legitimate customer complaints procedure, which can be used to hold agents to account.

Regulation of Property Agents (RoPA)

Propertymark welcomes the five main recommendations of RoPA that were included in the report released by the Ministry of Housing, Communities and Local Government in July 2019.

The proposed new regulatory framework will therefore cover sales agents across the UK and letting and managing agents in England only. Propertymark has long campaigned for greater regulation of property agents. We believe that mandatory qualifications will promote professionalism and basic standards within lettings and sales which will benefit both businesses and consumers. It is vital the UK Government implement the recommendations and set out how it plans to regulate the property sector as soon as possible.

A new regulatory approach will protect consumers from receiving low-quality services because the UK Government cannot continue legislating in a piecemeal fashion. This approach is unmanageable and unenforceable as demonstrated by the significant increase in legislation governing the sector over the last few years but no corresponding increase in prosecutions. We believe that overarching statutory regulation of the whole sector is needed.

The full response

Propertymark Qualifications

Get ahead of regulation and start studying for a Level 3 or Level 4 Propertymark Qualification.

Propertymark Qualifications is the market leader and the only specialist awarding body for agents in the sector offering up-to-date qualifications to fit in with any new syllabus required and offer continued support to students.

Find out more about the differences in qualifications and how to enrol below.

Find out more